Petrobras refineries operating at 85%

MOSCOW (MRC) -- Brazilian state oil company Petroleo Brasileiro SA is operating its refineries at a utilization rate of 85 percent and has gained market share in diesel after a subsidy program was instituted, reported Reuters with reference to an executive.

Petrobras, as the company is known, previously reported its refinery utilization rate was 81 percent in June.

The company is still negotiating a partnership to finish building the Comperj refinery in Rio de Janeiro and it expected to have an announcement on the matter by the end of the year, said Jorge Celestino, director of refining and natural gas.

As MRC informed before, in October 2017, Petrobras’ minority stakes in Braskem and Deten Quimica was excluded from Petrobras’s divestment program, according to a government decree published in Brazil’s Official Gazette. The decree prevents Petrobras from immediately selling its minority stake in Braskem, which had been announced last year. A new decree will be required to release the stock sale.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.

U.S. union seeks raises, three-year contract for refinery workers

MOSCOW (MRC) - Union officials representing 30,000 workers at U.S. oil refineries and chemical plants said they will pursue sizable wage increases and a 3-year contract in coming negotiations, said Reuters.

Contract talks, which begin in January, come as U.S. refiners are enjoying strong profits, near-full utilization rates and record product exports. In the June quarter, the margin on turning crude to gasoline, diesel and other products was the highest since 2015.

The United Steelworkers union (USW) wants a wage increase comparable to the 6 percent per year increase it originally sought during 2015 talks, Kim Nibarger, chairman of the USW’s national oil bargaining program, said in an interview following a three-day union meeting in San Diego.

In 2015, USW members went on a six-week strike at 12 U.S. refineries and three chemical plants. In the end, they accepted a four-year contract that provided members between 2.5 percent to 3.5 percent annual increases each year and changes to working conditions.

Nibarger declined to provide specifics of the proposals that union officials will bring to their members in coming weeks. Local union members will have 45 days to vote on the proposals reached on Wednesday. If 75 percent of locals agree, the wage increase will be presented to companies in January.

Shell Oil Co, the U.S. arm of Royal Dutch Shell Plc (RDSa.AS) was once again named lead negotiator on behalf of companies that own U.S. refineries, including Marathon Petroleum Corp (MPC.N) BP Plc (BP.L), Exxon Mobil Corp (XOM.N), Valero Energy Corp (VLO.N), and smaller refiners such as HollyFrontier Corp (HFC.N) and Delek US Holdings Inc (DK.N).

The USW also wants improvements in a standard meant to reduce fatigue among its workers. It sought a similar change in 2015, he said.

In 2015, the national strike lasted six weeks and some local strikes continued for months with workers at the Marathon Galveston Bay Refinery in Texas not returning to work until July.

The current USW contract runs out on Feb. 1.

BASF and LetterOne sign agreement to merge Wintershall and DEA

MOSCOW (MRC) -- BASF and LetterOne signed a definitive transaction agreement to merge their respective oil and gas businesses in a joint venture, which will operate under the name Wintershall DEA, BASF and LetterOne said.

Closing of the transaction is expected in the first half of 2019, subject to approvals of merger control and foreign investment authorities as well as mining authorities and the German Federal Network Agency. Until closing, Wintershall and DEA will continue to operate as independent companies.

In 2017, the combined business of Wintershall and DEA had pro-forma sales of EUR4.7 billion, income from operations before depreciation and amortization (EBITDA) of EUR2.8 billion and net income of EUR740 million. In 2017, pro-forma hydrocarbon production of Wintershall and DEA totaled 210 million barrels of oil equivalent (BOE); this equals a production of around 575,000 BOE per day. The joint venture will have a regionally more balanced footprint with growth opportunities in the core regions and strives for a daily production of 750,000 to 800,000 BOE between 2021 and 2023. Through the merger, synergies of at least EUR200 million per year are expected as of the third year following the closing of the transaction.

To effect the merger, LetterOne will contribute all its shares in DEA Deutsche Erdol AG into Wintershall Holding GmbH against the issuance of new shares of the company to LetterOne. Wintershall will then be renamed Wintershall DEA, which will be headquartered in Kassel and Hamburg. BASF will initially hold 67% and LetterOne 33% of Wintershall DEA’s ordinary shares reflecting the value of the respective exploration and production businesses of Wintershall and DEA. To reflect the value of Wintershall’s gas transportation business, BASF will receive additional preference shares. No later than 36 months after closing but in all cases before an IPO, these preference shares will be converted into ordinary shares of the company Wintershall DEA. This will result in a total shareholding of BASF in Wintershall DEA of 72.7%.

The oil and gas business of BASF is bundled in the Wintershall Group consisting of Wintershall Holding GmbH and its subsidiaries, including the gas transportation business. The oil and gas business of LetterOne comprises DEA Deutsche Erdol AG and its subsidiaries.

DEA is operating in the field of exploration and production of crude oil and natural gas and is headquartered in Hamburg, Germany. The company has long-standing experience along the entire value chain of the upstream business. With its workforce of around 1,150 employees, DEA has stakes in production facilities and concessions in Germany, Norway, Denmark, Egypt, Algeria and Mexico.

Wintershall, headquartered in Kassel, Germany, focuses on exploration and production in oil and gas-rich regions in Europe, Russia, South America, North Africa, and the Middle East. Together with Gazprom, Wintershall is also active in the transportation of natural gas in Europe. The company has about 2,000 employees worldwide and is Germany’s largest, internationally active oil and natural gas producer.

Borealis Executive Vice President Base Chemicals Markku Korvenranta to step down

MOSCOW (MRC) -- Borealis, a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers, announced today that Markku Korvenranta, Borealis EVP Base Chemicals, will step down from his role, said the company.

"We would like to thank Markku for the outstanding work, commitment and leadership during his years at Borealis. Markku has made significant contributions to the successful growth journey of Borealis and we wish him good luck for his future," commented Alfred Stern, CEO of Borealis.

"After spending 28 successful years at Borealis and after having been EVP Base Chemicals and a member of the Executive Board since September 2010, I have decided it is time to pursue other career opportunities," said Markku Korvenranta.

Markku Korvenranta will leave Borealis on 30 September 2018.

As MRC informed earlier, Borealis and United Chemical Company LLP (UCC) have signed a Joint Development Agreement (JDA) for the development of a world-scale polyethylene project, integrated with an ethane cracker, in the Republic of Kazakhstan.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With its head office in Vienna, Austria, the company currently has around 6,600 employees and operates in over 120 countries. Borealis generated EUR 7.5 billion in sales revenue and a net profit of EUR 1,095 million in 2017. Mubadala, through its holding company, owns 64% of the company, with the remaining 36% belonging to Austria-based OMV, an integrated, international oil and gas company. Borealis provides services and products to customers around the world in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company (ADNOC).

PP plant to be take off-stream by Al Waha

MOSCOW (MRC) -- Al Waha Petrochemicals, a subsidiary of Sahara Petrochemicals, was in plans to shut a polypropylene (PP) plant for a maintenance turnaround, as per Apic-online.

A Polymerupdate source in Saudi Arabia informed that the plant was likely to be take off-line in end-September, 2018. It is slated to remain under maintenance for around two weeks.

Located in Jubail, Saudi Arabia, the plant has a production capacity of 450,000 mt/year.

Sadara Chemical Company is a USD20 billion joint venture that was developed by Saudi Aramco and The Dow Chemical Company. The more than 3 million metric tons of performance-focused products from the Sadara complex will add new value chains to the Kingdom’s vast petroleum reserves, resulting in the diversification of the economy and region.